Bitcoin's potential $120K surge and the roles decrease in long-term holder holdings could play in this development
Bitcoin's long-term holders (LTHs) have been gradually reducing their balances during the recent rally, marking a shift from the aggressive selling observed in past cycles. This cautious profit-taking, according to analysis by Sentora, has been ongoing for the past three months.
The reduced selling pressure from these holders could help sustain Bitcoin's upward momentum and price stability around the $118,000-$122,000 range. The weekly and monthly gains for Bitcoin stand at 3.6% and 0.63%, respectively, as of the current price of $118,631.
Checkonchain data shows that the Hodler Net Position Change is currently -21.5K BTC, indicating a sustained net outflow from long-term holders. Despite this reduction, the selling rate from long-term holders has eased to a 3-week low.
This shift in behaviour could be a departure from traditional cycle behaviour. Historically, such market behaviour reflects strategic profit-taking, which is less likely to have a significant negative pressure on price movement.
Concurrently, institutional inflows, including $14.8 billion into Bitcoin ETFs in Q2 2025, plus a decline in exchange balances (indicating storage in cold wallets), show strong accumulation. This institutional demand offsets LTH profit-taking, reinforcing Bitcoin’s narrative as a strategic, long-term asset.
The Long-Term Holder Sell-side Risk Ratio has fallen for 30 straight days to 0.0010033, a monthly low and below liquidity risk levels. The decline in LTHs' Realised Profit has been continuous over the past 3 weeks, dropping from 13.8K BTC to 5.6K BTC.
However, market watchers remain alert to shifts in LTH accumulation patterns that could signal a trend reversal. If profit-taking picks up again among long-term holders and reaches elevated levels, Bitcoin may face pressure from LTHs and potentially drop on its price charts.
In previous cycles, sustained LTH selling applied heavier downward pressure than what is currently observed. If long-term holders reduce profit-taking entirely and see balances recover, Bitcoin can reclaim $120,234.
In summary, the cautious profit-taking by long-term holders during the recent rally reflects a shift from prior cycle behaviour, where selling was more aggressive. The low selling pressure and simultaneous institutional accumulation suggest a controlled supply environment supporting price stability and setting up for potential upward movement—though market watchers remain alert to shifts in LTH accumulation patterns that could signal a trend reversal.
- The reduced selling pressure from long-term Bitcoin holders, coupled with the inflow of institutional funds into Bitcoin ETFs, indicates a shift towards a more controlled supply environment for crypto finance, potentially supporting price stability and sustainable upward momentum in the long run.
- Despite the net outflow of Bitcoin from long-term holders, the decline in exchange balances suggests that these coins are being stored in cold wallets, which could indicate a strategic, long-term investment approach rather than short-term profit-taking, as seen in previous cycles.
- The ongoing reduction in selling from long-term Bitcoin holders, coupled with the increasingly positive LTH Sell-side Risk Ratio and the decline in realised profit, indicate a decrease in liquidation risk for Bitcoin investors, making it an attractive option for those interested in investing in Ethereum and other cryptocurrencies for the long term.
